Fund Times: Openings, Closings & Manager Changes

Strong Investments offers more value funds, American Express makes room for three top Fidelity managers, and Wasatch closes some hot funds.

Openings
Strong Investments thinks it's time to add more value funds, including one offering in one of the hottest categories of the past two years.

Next month the Milwaukee-based fund family will roll out three new value funds: Strong All Cap Value, Strong Explorer Value, and Strong Small Company Value, according to filings with the Securities and Exchange Commission.

All Cap Value and Explorer Value will look for stocks of all market capitalizations with cheap valuations. All Cap Value also will be able to hedge its portfolio by writing call and put options.

Small Company Value will focus on small-cap value names, using the Russell 2500 Index as its investable universe. Small-cap value was the best performing domestic-stock category of last year, and it was also one of the best performing fund groups of 2000. The no-load funds will have expense ratios of about 1% of assets, including 12b-1 marketing fees.

Robert J. Costomiris, who has run Strong Advisor U.S. Value  since October of last year, will run the Explorer Value and Small Company Value funds. Charles Rinaldi, who has achieved good returns during his tenure at Strong Advisor Small Cap Value  and Strong Balanced Stock , as well as average results at Strong Multicap Value , will run the All Cap Value Fund.

Because of Costomiris' short record at his current charge, we see little reason to opt for his new funds over more-proven offerings. Rinaldi has a longer and more impressive record, but we wonder why Strong has decided it needs more multicap funds besides the one Rinaldi already manages.

Fremont Investment Advisors has officially launched its Fremont New Era Growth Fund, a no-load domestic large-cap offering. H. Kent Mergler of Florida-based institutional money manager Northstar Capital Management will lead the fund's management team.

Closings, Mergers, and Liquidations
Wasatch Micro Cap Growth (WMICX), which had been closed to new investors, has shut its doors to all new investments, including those from existing shareholders. The nearly $500-million-in-assets fund, which has been better than virtually all of its competition over the trailing one-, three- and five-year periods, has done this before. Last year it shut itself to all new investments from existing and prospective shareholders in an effort to control cash flows, but eventually reopened to additional contributions from existing shareholders.

Wasatch Core Growth Fund (WGROX), which has more than a $1 billion in assets and one of the best long-term records in the small-blend category, also closed its doors to all new investors. The fund is still accepting investments from existing shareholders, however.

First American funds will merge its $88-million-in-assets First American Relative Value Fund   into its $150-million-in-assets First American Large Cap Value Fund  . Relative Value manager Joe Belew will join the Large Cap Value team.

Regional bank Wachovia, which merged last year with southeastern rival First Union, is merging many of its Wachovia mutual funds with First Union's Evergreen fund family, according to SEC documents.

Many of the combinations involve funds with similar names and investing styles. In every case investors should examine the new funds closely to see if they still fit in their portfolios. Here are some of the mergers: Wachovia Equity Index   will merge with Evergreen Equity Index  ; Evergreen Secular Growth  will merge with Evergreen Select Strategic Growth ; Wachovia Personal Equity , Wachovia Equity, and Wachovia Growth and Income  will combine with Evergreen Core Equity (EISCX); Wachovia Emerging Markets  and Evergreen Latin America   will merge with Evergreen Emerging Markets Growth (EMGAX); Wachovia International Equity  will merge with Evergreen International Growth ; Wachovia Intermediate Fixed Income , Evergreen Short-Duration Income  , and Wachovia Short-Term Fixed Income  will merge with Evergreen Fixed Income ; Wachovia Fixed Income , Evergreen Intermediate Term Bond , and Evergreen Income Plus  will merge with Evergreen Core Bond ; Wachovia Balanced will merge with Evergreen Balanced (EKBAX); Wachovia New Horizons  will merge with Evergreen Omega (EKOAX); Wachovia Quantitative Equity  will merge with Evergreen Stock Selector (EVSAX); Wachovia Special Values   will change its name to Evergreen Special Values; and Wachovia Blue Chip Value (WBCAX) will merge with Evergreen Value . Wachovia will also merge its municipal-bond funds for North Carolina, Georgia, Virginia, and South Carolina with similar Evergreen state funds.

Vintage Technology  , a tiny specialty-technology fund that lost more than 70% of its value between its inception and the end of last month, liquidated February 6.

Manager Changes
American Express Financial had to dismiss a couple of stock-pickers to make room for the three hotshots it lured from Fidelity Investments this past week.

Minneapolis-based American Express Financial's AXP fund family has removed AXP Growth  managers Lisa Costa and Steve Mullinix to make room for former Fidelity Fund  (FFIDX) manager Nick Thakore. An American Express spokesman said Mullinix and Costa have been given the opportunity to apply for other jobs within the company.

AXP Mutual  manager Mike Mans has moved to an internal American Express hedge fund to make way for former Fidelity Export & Multinational  manager Doug Chase. AXP is giving former Fidelity Balanced (FBALX) manager Bob Ewing AXP Large Cap Equity, a fund that will be launched later this year.

AXP Growth and AXP Mutual have been among the worst offerings in their respective categories over the years.

AXP's talent raid on Fidelity incited other manager changes at the latter firm. John Avery will take Thakore's place at Fidelity Fund. Lewis Salemy, manager of Fidelity Growth & Income II  (FGRTX), will replace Avery at Fidelity Advisor Balanced (FABLX) and Fidelity Advisor Growth & Income  (FGIRX). Avery had put up mixed numbers at those funds.

Larry Rakers will take over the equity portion of Fidelity Balanced, which Ewing had managed. Meanwhile, Victor Thay will take over Rakers' former charge, Fidelity Convertible Securities  (FCVSX). Rakers had managed Convertible Securities only since mid-2001, but he's an experienced sector-fund manager.

Tim Cohen will replace Chase at Export & Multinational. This will be Cohen's first diversified-fund charge, but he has managed sector funds in the telecom, utilities, and insurance areas.

At Columbia Technology (CMTFX), Chad Fleischman is gone, leaving comanager Steve Marshman to run the fund, according to SEC documents. Through February 7, the fund had lost more than a third of its value over the past year, but that was still better than 87% of its peers.

Rajiv Jain has taken over the subadvised Enterprise International Growth  for Fabrizio Pierallini, according to SEC documents. Jain and Pierallini have comanaged Vontobel International Equity  for nearly eight years.

Enterprise High-Yield Bond's  manager James Caywood now has a comanager, Tom Saake, who has been with the fund's subadvisor, Caywood-Scholl, for nearly 12 years, according to SEC filings.

Etc.
Janus Enterprise's  (JAENX) new manager Jonathan Coleman, who replaced longtime skipper Jim Goff last month, says he won't change the fund's aggressive-growth style, but he recently told Morningstar he does intend to broaden his definition of aggressive-growth stocks. Coleman, a current assistant portfolio manager on Janus Fund  and a former comanager on Janus Venture (JAVTX), plans to increase the number of names in the portfolio to about 80. He'll also limit top positions to 3% of assets. He intends to barbell the portfolio between faster-growing companies that fall in the tech and biotech arenas and slower-growing fare in more-stable sectors. For example, he touted strong growers in the industrial sector like Canadian National Railway. Coleman also won't set a minimum earnings-growth rate for stocks he owns.

Denver-based Janus Capital laid off another 222 people in its Denver retail shareholder-servicing department. This is the latest round of noninvestment-related job cuts at Janus. In little more than a year, the fund family has reduced its customer-relations phone staff from 1,500 to 225.

Merrill Lynch  has suspended all sales of its Mercury Focus Twenty Fund , which is a clone of the poor-performing Merrill Lynch Focus Twenty  (MAFOX) that Jim McCall ran until he resigned last November.

As hordes of people rush to file their income-tax returns before the April 15 deadline, Dreyfus Funds will change the name of its $51-million-in-assets Dreyfus Tax Smart Growth Fund  to Dreyfus Premier Core Equity and will stop trying to minimize the bite of taxable capital-gains and income distributions on returns. Dreyfus also will slap a 5.25% load on the offering.